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Papademos named Greece's transitional leader

November 10, 2011 |  4:55 am

Greece's two main political parties agreed to name Lucas Papademos as the country's new leader
REPORTING FROM ATHENS -– After days of haggling, Greece's two main political parties agreed Thursday on the appointment of Lucas Papademos, a trained economist and former governor of the Greek central bank, to serve as the financially troubled country's new leader through the next few months.

Papademos is to steer a transitional government through a vital period during which Greece is expected to start enacting an unpopular new bailout plan put together by European leaders to help avoid a chaotic default by Athens, which could set off a global financial meltdown.

The appointment caps four days of sly and at times surreptitious political play that left Greece’s international creditors and voters wary of the fate of this debt-saddled country. The make-up of the new Cabinet remained to be announced, a statement issued by the office of the Greek president said.

Papademos will succeed outgoing Prime Minister George Papandreou, who won a tight vote of confidence Saturday, only to announce a day later that he would step down in favor of a new leader to head a government of national unity. Greek lawmakers on all sides had called on Papandreou to let a less divisive figure take over and guide the country through its debt crisis.

Both Papandreou's Socialist party and the opposition New Democracy party found Papademos an acceptable candidate. A low-key academic, he oversaw Greece's entry into the Eurozone, served as vice president of the European Central Bank from 2002 to 2010 and is now a visiting professor at the John F. Kennedy School of Government at Harvard University.

Under pressure from European leaders and international lenders, Greece's rival parties agreed to form a landmark coalition government with the sole aim of ratifying and implementing a new loan-and-debt agreement that includes $140 billion in fresh rescue funds for Athens, plus a 50% write-down of Greek debt in private hands.

Athens' creditors have warned that failure to ratify and enact the new debt-crisis plan would block disbursal of $11 billion in emergency loans from Greece's first international bailout package, which was granted last year. Without the aid, Greece could go bust within weeks.

The new administration headed by Papademos is expected to last three months, until a general election tentatively scheduled for mid-February.

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-- Anthee Carassava

Photo: Lucas Papademos in March 2009. Credit: Eric Vidal / Reuters

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